MOSCOW (Reuters) – Russia is supplying its S-300 air defense missile systems to Iran ahead of schedule and is now in talks with the Islamic Republic on deliveries of other military equipment, the head of Russia’s federal arms exports service, FSVTS, said on Tuesday.
“The talk is about only permitted items which are not on the U.N. list of banned (weapons),” Alexander Fomin told reporters. He did not elaborate.
(Reporting by Denis Dyomkin; Writing by Dmitry Solovyov; Editing by Dominic Evans)
By Sarah McFarlane
LONDON (Reuters) – Crude prices firmed on Thursday after the International Energy Agency (IEA) said non-OPEC production would fall this year by the most in a generation and help rebalance a market dogged by oversupply.
IEA chief Fatih Birol said low oil prices had cut investment by about 40 percent over the past two years, with sharp falls in the United States, Canada, Latin America and Russia.
Benchmark Brent crude futures were up 12 cents at $45.92 a barrel by 1204 GMT. U.S. crude futures were 4 cents higher at $44.22. Both have gained about 70 percent from lows hit between January and February.
“It looks very strong at the moment, sentiment is bullish, technicals look fine, so I rather see prices rising further from here,” Commerzbank analyst Carsten Fritsch said.
The drop in supply from some producers, however, could be offset by increased output in countries such as Russia and Iran.
Russia’s energy minister said it might push oil production to historic highs and Iran has reiterated its intention to reach output of 4 million barrels per day after a global deal to freeze output collapsed and Saudi Arabia threatened to flood markets with more crude.
Libya could also rapidly ramp up oil production as soon as stability returns, the head of Libya National Oil Corporation (NOC) told an oil summit in Paris.
Nigeria will hold talks with Saudi Arabia, Iran and other producers by May, hoping to reach a deal on an output freeze at the next OPEC meeting in June, where it is expected to be a key item on the agenda.
“The focus of the market is primarily on price-supportive news and that’s just an indication of how sentiment is,” Saxo Bank senior manager Ole Hansen said.
Hansen said fund flows into commodities had been strong this week, driven by a weaker dollar.
The U.S. currency hit 10-month lows against some commodity-related currencies earlier this week. The Thomson Reuters Core Commodity Index rose to its highest since early December. [MKTS/GLOB]
“This whole recovery has been driven by supply being capped and supply is price sensitive and again we’re back to levels where we could see some of these producers breathe again,” Hansen said.
French bank BNP Paribas said any hope of the oil market rebalancing from the current surplus relied on a predicted decline in U.S. oil production.
“The U.S. accounts for the bulk of non-OPEC’s 2016 oil supply contraction of 700,000 barrels per day forecast. If the decline in the U.S. oil supply proves insufficient to tighten balances, then … the oil price will remain low,” it said.
In refined products, China’s exports of diesel and gasoline soared, spilling surplus fuel onto a market that is already well supplied, and threatening to cut Asian benchmark refining margins further.
(Additional reporting by Henning Gloystein in Singapore and Osamu Tsukimori in Tokyo; editing by David Evans and David Clarke)
LONDON (Reuters) – Iran is determined to recover its share of the world oil market following the lifting of sanctions, and can withstand low prices since it has sold oil for as little as $6 a barrel in the past, a source close to Iranian oil policy said.
The source was speaking after Russia, one of the participants at last weekend’s meeting of oil producing nations which failed to deliver an agreement to freeze output, indicated it could raise supply.
“We paid for our barrels with our centrifuges,” the source said, referring to Iran’s acceptance of curbs on its nuclear program in order for Western sanctions on Tehran to be lifted.
“We are going to get our share back. For us, oil is only 12 percent of our GDP. We used to sell oil in the war (between Iran and Iraq in the 1980s) at $6 a barrel.”
He added any agreement to restrain supply at the next OPEC meeting in June depended on Saudi Arabia and non-member Russia.
“If June is going to produce an agreement, you have to ask Saudi Arabia and Russia. They are the problem.”
(Reporting by Alex Lawler; Editing by Dmitry Zhdannikov and Mark Potter)
By Devika Krishna Kumar
NEW YORK (Reuters) – Oil prices jumped more than 3 percent on Tuesday after a strike by workers in Kuwait nearly halved the OPEC member’s crude production, overshadowing bearish sentiment after Sunday’s failure by producers to agree to freeze output levels.
Thousands of Kuwaiti oil workers downed tools for a third day on Tuesday to protest against planned public sector pay reform, cutting crude output to 1.5 million barrels per day (bpd), according to an oil spokesman cited by news agency KUNA.
That is little more than half of Kuwait’s average output of 2.8 million bpd in March.
Reports of power outages leading to output declines of about 200,000 bpd in Venezuela and a pipeline fire in Nigeria that may have cut production by 400,000 bpd, along with the upcoming refinery maintenance season boosted the rebalancing of market and was supporting prices, traders said.
“The Kuwait strike in particular is a major factor. It was a bolt out of the blue in terms of how much oil came off the market so quickly,” said John Kilduff, partner at Again Capital, a New York energy hedge fund.
“Usually these things have a ramp down period but this seems to be able to flick a switch…It’s supportive for the market for now”
Brent crude futures <LCOc1>, the global benchmark, traded at up $1.29 at $44.20 a barrel by 11:20 a.m. EST. U.S. crude futures <CLc1> rose $1.47 to $41.25 a barrel.
The rally was catalyzed by the S&P 500 index <.SPX> crossing a key level that triggered buying in oil and across commodities.
Analysts, however, said Kuwait’s disruption would likely be brief and investors would soon focus back on the market’s oversupply given the failure of major exporters on Sunday to agree to freeze output to avoid worsening the glut.
“In the coming days oil production is likely to partially recover from its initial drop as non-striking staff are redistributed and inventories drawn upon, avoiding a force majeure on loadings,” policy risk consultancy Eurasia Group said.
A deal to freeze oil output by OPEC and non-OPEC producers fell apart at the weekend meeting in Doha after Saudi Arabia demanded Iran join in despite calls on Riyadh to save the agreement and help prop up crude prices.
Iran has repeatedly said it would prioritize regaining pre-sanctions crude output levels over discussing an output freeze.
Tehran’s crude oil exports have risen to around 1.75 million bpd so far in April, according to an industry source and shipping data. Exports averaged about 1.6 million bpd in March
Other exporters who participated in the failed Doha talks have already shifted attention back to their own interests. Russia and Venezuela have indicated they hope to increase output this year.
(Additional reporting by Karolin Schaps in London and Henning Gloystein in Singapore; Editing by Marguerita Choy)
By Yesim Dikmen and Melih Aslan
ISTANBUL (Reuters) – Leaders from more than 50 Muslim nations accused Iran on Friday of supporting terrorism and interfering in the internal affairs of regional states including Syria and Yemen.
The leaders, including Iran’s President Hassan Rouhani, have been attending a summit in Istanbul this week of the 57-member Organisation of Islamic Cooperation (OIC) to discuss a range of issues such as the humanitarian fall-out from Syria’s civil war.
“The Conference deplored Iran’s interference in the internal affairs of the States of the region and other Member States including Bahrain, Yemen, Syria, and Somalia, and its continued support for terrorism,” the OIC said in its final summit communique.
It also stressed the need for “cooperative relations” between Iran and other Muslim countries, including refraining from the use or threat of force.
Both Turkey, which has assumed the three-year rotating presidency of the OIC, and Saudi Arabia are part of the U.S.-led coalition against Islamic State militants in Syria and are also opponents of President Bashar al-Assad, a stance that has put them at odds with Iran, an ally of the Syrian leader.
Shi’ite Iran is also allied with the Houthi movement in Yemen, which has been battling forces loyal to Yemen’s Saudi-backed president in a conflict that has killed more than 6,000 people since March 2015.
The final communique came a day after Iran’s Rouhani urged summit delegates to avoid sending out divisive messages.
“No message which would fuel division in the Islamic community should come out of the conference,” said Rouhani, according to Iranian state television.
(Additional reporting by Humeyra Pamuk and Daren Butler; Writing by David Dolan; Editing by Gareth Jones)
ISTANBUL (Reuters) – Muslim countries have agreed to work together more closely to fight terrorism and other crimes and will establish an Istanbul-based center for greater police cooperation, President Tayyip Erdogan said on Thursday.
Leaders from the Muslim world are attending a summit in Istanbul this week of the Organization of Islamic Cooperation (OIC) to discuss issues facing the grouping’s 57 member states, including the humanitarian fall-out from Syria’s civil war.
“It would be appropriate to create a structure among OIC countries which would strengthen and institutionalize cooperation against terror and other crimes,” Erdogan said in his opening address at the summit.
“With this in mind, our proposal for the establishment of an OIC police cooperation and coordination center based in Istanbul found acceptance.”
Erdogan, whose country is set to take over the three-year rotating presidency of the OIC, gave no details about the new police center or say when it might start work.
Turkey has long pressed for closer regional cooperation in tackling terrorism as its army and security forces battle Kurdish militants that Ankara and its Western allies classify as terrorists.
Turkey is part of the U.S.-led coalition against Islamic State in neighboring Syria and is also a vocal opponent of Syrian President Bashar al-Assad, a stance that has put it at odds with Assad’s ally, Iran.
On Thursday Erdogan called for greater unity among Muslim countries.
“The more that we as Muslims, as Muslim countries, fall out with each other, the more the innocents who have put their hopes in us will be exposed to strife,” he said.
Also speaking at the summit, Iranian President Hassan Rouhani spoke out against divisions among Muslims. Shi’ite Iran is at loggerheads with Sunni Muslim powers including Saudi Arabia in Yemen as well as in Syria.
“No message which would fuel division in the Islamic community should come out of the conference,” Rouhani told the conference, according to Iranian state television.
(Additional reporting by Parisa Hafezi; Editing by Gareth Jones; Writing by David Dolan)
By Tom Perry, John Irish and Bozorgmehr Sharafedin
BEIRUT/PARIS/DUBAI (Reuters) – France and Iran voiced concern over escalating violence in Syria on Tuesday, echoing warnings from the United States and Russia as fighting near the city of Aleppo put more pressure on a fragile truce agreement.
The already widely violated “cessation of hostilities” agreement brokered by Russia and the United States has been strained to breaking point by an upsurge in fighting between Syrian government forces and rebels near Aleppo.
The escalation underlines the already bleak outlook for peace talks set to reconvene this week in Geneva. The United Nations says the talks will resume on Wednesday. The government delegation has said it is ready to join the talks from Friday.
With President Bashar al-Assad buoyed by Russian and Iranian military support, the Damascus government is due to hold parliamentary elections on Wednesday, a vote seen by Assad’s opponents as illegitimate and provocative.
Iran said an increase in ceasefire violations could harm the political process a day after Russia said it had asked the United States to stop a mobilization of militants near Aleppo, Syria’s biggest city until the conflict erupted in 2011.
Iranian Deputy Foreign Minister Hossein Amir-Abdollahian, speaking after a meeting with U.N. Special Envoy Staffan de Mistura in Tehran, blamed the “increasing activities of armed groups” for the violations.
France, which backs the opposition, also expressed concern, but blamed the other side. “It warns that the impact of the regime and its allies’ offensives around Aleppo and Eastern Ghouta are a threat to the cessation of hostilities,” government spokesman Romain Nadal said. The Eastern Ghouta is an opposition-held area near Damascus.
Syria’s civil war has killed more than 250,000 people, created the world’s worst refugee crisis, allowed for the rise of Islamic State and drawn in regional and international powers. The intervention of Russia swung the war in Assad’s favor.
WASHINGTON “VERY, VERY CONCERNED”
The United States, which also backs rebels fighting Assad, on Monday said it was “very, very concerned” about increased violence and blamed the Syrian government for the vast majority of truce violations.
Both the government and a large number of rebel groups had pledged to respect the cessation of hostilities agreed in February with the aim of allowing a resumption of diplomacy towards ending the five-year-long war. Jihadist groups including the Nusra Front and Islamic State were not part of the deal.
A senior official close to the Syrian government said the truce had effectively collapsed.
“On the ground the truce does not exist,” said the official, who is not Syrian and declined to be named because he was giving a personal assessment. “The level of tension in Syria will increase in the coming months.”
The eruption of fighting on the front lines south of Aleppo marks the most serious challenge yet to the truce.
The Syrian Observatory for Human Rights, a British-based organization that tracks the war, said dozens of government fighters had been killed in a big offensive to take the town of Telat al-Eis near the Aleppo-Damascus highway on Tuesday.
A rebel fighting in the area said the assault launched at dawn was backed by Russian air strikes and Iranian militias, adding that the attackers had suffered heavy losses. The Syrian military could not be reached for comment.
Iranian Revolutionary Guards and Lebanon’s Hezbollah have both deployed in the southern Aleppo area in support of the government, while the Nusra Front is also fighting in close proximity to other rebels.
The Syrian prime minister was quoted on Sunday as saying government forces were preparing a major operation in the region with Russian support.
Further south in Homs province, Russia said one of its attack helicopters had crashed in the early hours of Tuesday, killing both pilots. It said the helicopter had not been shot down and the cause of the crash was being investigated.
“PROVOCATIVE” ELECTION
De Mistura, speaking in Tehran, said he and Amir-Abdollahian had agreed on the importance of the cessation continuing, that aid should reach every Syrian and that “a political process leading to a political transition is now crucially urgent”.
De Mistura, whose two predecessors quit, has said he wants the next round of Geneva talks to be “quite concrete” in leading towards a political transition.
Ahead of the first round of talks, Damascus had ruled out any discussion of the presidency, calling it a red line.
A senior Iranian official on Saturday rejected what he described as a U.S. request for Tehran’s help to make Assad leave power, saying he should serve out his term and be allowed to run in a presidential election “as any Syrian”.
Some members of the main Syrian opposition alliance, the High Negotiations Committee (HNC), arrived in Geneva on Tuesday, and U.N. spokesman in Geneva Ahmad Fawzi said the talks were expected to begin on Wednesday.
De Mistura is working according to a U.N. Security Council resolution approved in December that sets out a political process including elections after the establishment of “credible” governance and the approval of a new constitution.
The Syrian government says it is holding Wednesday’s elections in line with the existing timetable that requires a vote every four years. Russia has said the vote does not go against the peace talks and is in line with the constitution.
French President Francois Hollande last month, however, said the idea was provocative and “totally unrealistic”.
(Additional reporting by Tom Miles in Geneva, and Samia Nakhoul and Laila Bassam; Writing by Tom Perry; Editing by Peter Millership and Giles Elgood)
ROME (Reuters) – Italy and Iran signed deals potentially worth billions on Tuesday when Prime Minister Matteo Renzi visited Tehran seeking a strong Italian foothold in a nation hungry for infrastructure investment as it emerges from financial isolation.
Renzi was accompanied by a delegation of some 60 business leaders in sectors including, energy, railways and defense, and by Italy’s export agency and state lender which pledged billions of euros in credit lines and guarantees.
Three months ago President Hassan Rouhani made Italy his first stop in Europe as he sought to drum up investment in the Iranian economy, which rejoined the global trading system in January following a deal to lift crippling sanctions in exchange for limiting its nuclear activities.
“The end of sanctions is a historic step not only for Iran but for the whole region,” Renzi told reporters in Tehran with Rouhani standing by his side.
“We are committed to making sure the efforts of the international community are accompanied by mutual trust and by the immediate relaunch of economic links.”
Business delegations from other European countries are expected in Tehran in coming weeks, but Italy is well positioned to win contracts that could deliver a much needed export boost for its chronically sluggish economy.
Enel said it signed a memorandum of understanding with the National Iranian Gas Export Company on possible future cooperation in natural gas, liquefied natural gas and related infrastructure, that could lead to long-term gas supplies for its power stations.
The Enel deal was one of seven signed by Renzi and Rouhani, Iranian state television said. Renzi was due to return to Rome on Wednesday.
Oil major Eni has an agreement that allows it to take oil from Iran in payment for previous investments while oil service group Saipem, expected to clinch a new deal on Tuesday, had already signed preliminary deals in January that a source said at the time could be worth $4-5 billion.
Italy’s state railways company, Ferrovie dello Stato, said it signed a “framework of cooperation” agreement to build two high-speed lines in Iran. The contract could be worth some 3 billion euros, a source close to the matter said.
Italy’s state-run lender Cassa Depositi e Prestiti will offer credit lines of 4 billion euros to companies building oil and gas infrastructure, while export agency SACE will guarantee loans and offer trade financing of 4.8 billion euros, a SACE statement said.
($1 = 0.8758 euros)
(Reporting by Steve Scherer and Stephen Jewkes, additional reporting by Sam Wilkin in Dubai, Isla Binnie in Rome and Francesca Landini in Milan, editing by Isla Binnie and Robin Pomeroy)
DUBAI (Reuters) – Russia has delivered the first part of an advanced missile defense system to Iran, Iranian media reported on Monday, starting to equip Tehran with technology that was blocked before it signed a deal with world powers on its nuclear program.
The S-300 surface-to-air system was first deployed at the height of the Cold War in 1979.
In its updated form it is one of the most advanced systems of its kind and, according to British security think tank RUSI, can engage multiple aircraft and ballistic missiles around 150 km (90 miles) away.
Russia’s agreement to provide Iran with S-300 has sparked concern in Israel, whose government Iran has said it aims to destroy.
In a recorded transmission, state television showed Foreign Ministry spokesman Hossein Jaber Ansari telling a news conference on Monday: “I announce today that the first phase of this (delayed) contract has been implemented.”
Ansari was replying to reporters’ questions about videos on social media showing what appeared to be parts of an S-300 missile system on trucks in northern Iran.
Russia says it canceled a contract to deliver S-300s to Iran in 2010 under pressure from the West. President Vladimir Putin lifted that self-imposed ban in April 2015, after an interim agreement that paved the way for July’s full nuclear deal.
The U.S. military has said it has accounted for the possible delivery of the S-300 to Iran in its contingency planning.
(Reporting by Bozorgmehr Sharafedin, Editing by William Maclean and John Stonestreet)
By Amanda Cooper
LONDON (Reuters) – Oil held around its lowest in a month on Monday as investors ditched some of their bullish bets on another price rise and the chances that top exporters will agree to rein in overproduction appeared to fade.
Iran will continue increasing oil production and exports until it reaches the market position it enjoyed before the imposition of sanctions, Oil Minister Bijan Zanganeh was quoted as saying by the semi-official Mehr news agency.
Saudi Arabia, which spearheaded an initial proposal in February for producers to limit output, said last week that it would not join any effort to do so unless Iran were on board, while Russia reported its highest oil production in 30 years.
This has cast doubt on the ability of the world’s largest exporters to reach an when they meet in Doha this month to discuss how to align global supply and demand.
Hedge funds last week cut their bullish holdings of crude oil futures for the first time in six weeks. [CFTC/]
Brent crude futures were 14 cents higher at $38.81 a barrel by 1232 GMT, still close to their lowest for a month but 40 percent above their in mid-February level.
U.S. crude futures were 22 cents higher at $37.01.
“It’s not very strange to see a wave of profit-taking and some unwinding of long positions, and some people even saying they could reposition for a move towards lower prices,” said ABN Amro’s chief energy economist, Hans van Cleef.
“That’s part of a normal cycle that I think can continue this week. We might see $36 or $37 … Prices are coming down because of speculation Saudi Arabia will not join (the freeze deal) and that’s probably what we’ll see over the next three weeks – more speculation and more verbal intervention.”
Oil prices have fallen by more than 65 percent since mid-2014, when booming U.S. shale oil output and supply from within and outside OPEC created one of the largest global surpluses of crude in modern times.
Some analysts believe that even freezing production around record highs will help to reduce the surplus, given that demand is expected to continue to grow this year.
“Most of the negative news is in the price and for oil prices to weaken materially, something big would have to happen,” Gain Capital analyst Fawad Razaqzada said in a note.
U.S. production is proving more resilient to low oil prices than many expected, despite reduced drilling for new reserves as well as a jump in bankruptcies. [RIG/U]
“Given this backdrop, and the potential for an oil-freeze deal this month, the global supply-demand imbalance is likely to fade as we progress towards the latter part of this year,” Razaqzada added.
(Additional reporting by Henning Gloystein in Singapore; Editing by Dale Hudson and David Goodman)